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Getting Utilization Right

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Anonymous
Not applicable

Getting Utilization Right

I just opened a secured CC with my credit union with a $750 limit, and am going to try to ensure that I'm utilizing it in the best way I can to boost my scores.

 

From reading through the guides and posts here, I understand it's best that I keep any balance under $66.00 (i.e., under 9%) overall, especially on the day the issuer reports the account (which I plan to find out just as soon as I get the card). So should I plan to pay all but $25.00 to $50.00 (i.e. 3% to 6%) of the current statement balance before the due date, then the remainder after the reporting date, so that every report shows utilization at an optimal rate, as opposed to 0%? Or am I going about this the wrong way?

Message 1 of 3
2 REPLIES 2
js0319
Established Contributor

Re: Getting Utilization Right

The only reason why you'd want to worry about the remainder after the reporting date would be due to interest. Depending on what the grace period is, you would want to pay the full balance charged before the grace period expires.

 

From a reporting standpoint - it doesn't make that much of a difference to pay the remainder after the reporting date, if any. Since my primary card reports on the 1st of the month, I usually pay the entire balance off. If there are some pending charges that will post before the card reports, the totals on those charges are usually between 1-9%. However, I do pay the card every week or so because my limit is only $1k and I run $3-5k/month through the card. Because of the frequency of my payments, I have never paid a penny in interest.

 

I hope this helps.


AMEX PRG - NPSL I AMEX Everyday Preferred - $34.8k I Capital One Venture - $20k I Chase Sapphire Preferred - $25.5k I Chase Southwest Rapid Rewards Premier - $20.7k I Barclay Arrival + - $10k I Capital One Quicksilver - $10k I NFCU Flagship Rewards Visa Signature - $15k I NASA FCU - $10k I Texell FCU Visa - $5k I Chase Freedom - $9.9k I Citi Double Cash - $7.8k I Discover IT - $5k I NFCU CLOC - $15k I Total Unsecured Credit - $188,700

EQ FICO - 714 (5/24/16) I TU FICO - 772 (5/24/16) I EX FICO - 770 (5/24/16)
Message 2 of 3
Anonymous
Not applicable

Re: Getting Utilization Right

Thanks for the response, that's an excellent point about the interest. The rate is the lowest I've ever had on a card, whether in the days when my score was very good, or now that I'm rebuilding: 8.99%, so if I wind up on occastion paying that on a $25 balance, I'll be okay with it.

 

I had also considered paying weekly as a strategy, glad to hear it works for you.

Message 3 of 3
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